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India and Sri Lanka share more than just a maritime border — they’re connected by a rich, intertwined history that spans centuries of cultural exchange, trade, and economic collaboration. From the bustling ancient ports of Kaveripattinam and Mantai, where ships once carried spices, pearls, and fine textiles across the Indian Ocean, to today’s increasingly strategic bilateral relationships, the story of these two nations has long shaped the economic fabric of South Asia.
As India marches toward its ambitious goal of becoming the world’s second-largest economy by 2075, Sri Lanka—especially through projects like Port City Colombo, a master-planned city and multi-service Special Economic Zone (SEZ) —is stepping up as a valuable strategic partner.
In recent years, economic ties between the two nations have only grown stronger. Bilateral trade between India and Sri Lanka exceeded US$5.4 billion in FY 2022–23, with India exporting nearly US$4.5 billion worth of goods and importing close to US$1 billion in return. The trade basket is as diverse as it is significant—ranging from petroleum and pharmaceuticals to textiles and tea—illustrating a dynamic and complementary relationship.
India’s economy has experienced tremendous growth, driven by industrialization, a booming tech sector, expanding credit availability, and a young, skilled workforce. With the International Monetary Fund (IMF) projecting a GDP growth rate of 6.5% for 2025–26, India is poised to remain among the world’s fastest-growing major economies.
Its digital economy is surging too, powered by platforms like UPI and Aadhaar and a globally competitive IT-BPM sector. But to reach its ambitious US$30 trillion GDP target, strategic partnerships with neighbouring countries like Sri Lanka will be crucial in expanding regional trade influence and strengthening investment ties across South Asia.
Strategically located along key Indian Ocean shipping lanes, Sri Lanka holds significant geopolitical and economic importance for India. The India–Sri Lanka Free Trade Agreement (ISFTA) strengthens this partnership further, ensuring market access and economic alignment.
Port City Colombo, a next-generation, multi-service Special Economic Zone (SEZ), presents a timely opportunity for Indian enterprises seeking regional expansion. With investor-friendly regulations, tax incentives, and a foreign currency-denominated, fintech-ready financial ecosystem, it offers an ideal base for raising capital, establishing regional headquarters, and accessing new markets.
Operating within Port City Colombo’s progressive legal framework enhances the ease of doing business and enables closer economic ties while reducing regulatory friction.
Home to nearly two billion people, South Asia is one of the world’s fastest-growing economic regions, with GDP growth averaging over 6% in recent years (excluding pandemic disruptions). The Asian Development Bank (ADB) indicates that India is leading the charge, contributing almost 80% of the region’s GDP and setting the pace in digital infrastructure, clean energy, manufacturing, and fintech.
However, India’s rise can’t happen in isolation. It needs strong platforms that bridge capital, services, and innovation across borders. Port City Colombo is that kind of platform that promotes a business environment that facilitates profitability for Indian companies looking to expand beyond their home region. It could serve as a powerful financial intermediary and catalyst for broader regional growth.
One of Port City Colombo’s strongest appeals lies in its proximity to India. Located just over an hour’s flight from cities like Chennai and Bengaluru, Colombo is closer to India’s southern economic hubs than many of India’s own northern regions. This proximity dramatically reduces logistics overheads and enables fast market access—not just to Sri Lanka but to ASEAN and broader South Asian economies.
What sets Port City Colombo apart isn’t just its location—it’s the regulatory and fiscal freedom that makes doing business easier, leaner, and more scalable, all under the streamlined oversight of the Colombo Port City Economic Commission.
Key fiscal incentives:
Non-fiscal incentives:
Port City Colombo enables scalable, agile operations with smart infrastructure, high-speed connectivity, and flexible spaces—making it an ideal base for IT/BPM, financial services, logistics, and real estate firms to reduce costs, streamline operations, and access regional growth.
Compared to other regional SEZs, Port City Colombo with its tax incentives has significantly lower operational costs (up to 30% in comparison to major Asian IT hubs) augmented by a talent pool that is equally competitive, with over 150,000 skilled tech professionals trained in areas like cloud, AI, and cybersecurity—on par with or exceeding Tier 2 Indian cities.
For Indian investors, Port City Colombo is not just about business. It’s built as a fully integrated live-work-play ecosystem that meets global lifestyle standards. With a lower cost of living compared to Indian or Southeast Asian cities, it appeals to Indian professionals seeking both opportunity and quality of life.
English is widely spoken, and with cultural familiarity, international schools, world-class healthcare, and upscale housing, it’s an ideal base for Indian expats and their families.
Setting up a business in Port City Colombo is designed to be straightforward and efficient, especially for Indian investors. The Colombo Port City Economic Commission (CPCEC) serves as a single-window investment facilitator for Indian investors and businesses. Here’s a snapshot of the process:
1. Application & Registration – Register as an Authorised Person (AP) applicant via the CPCEC Web Portal
2. Approval in Principle – Upon assessment, a Letter of Approval in Principle is issued
3. Regulatory Facilitation – As the Single Window Investment Facilitator, CPCEC facilitates necessary Regulatory Authority clearances
4. Licence Issuance & Business Activation – The AP Licence is granted, alongside the Investor Agreement and Certificate of Registration (for Offshore Companies), enabling businesses to commence operations
Long-term residency options are also available through Sri Lanka’s foreign investor programs, making it easier for founders and leadership teams to establish a presence. Port City Colombo provides the benefit of family-inclusive preferential visas for up to 10 years with a green channel for investment, business, employment, and residency.
For Indian investors, the decision to invest in Port City Colombo is backed by multiple compelling factors. Its geographic access, shared cultural ties, and progressive regulatory framework make it the ideal regional gateway.
India’s economic future is bright, but achieving its full potential will require strong regional collaboration. Whether it’s in trade, capital markets, technology, or talent, Port City Colombo is poised to accelerate and amplify India’s growth ambitions.
Take the next step. Discover how Port City Colombo can be your strategic base for expansion, innovation, and long-term success in the region.
To learn more or start your investment journey, visit www.portcitycolombo.lk
